485BPOS 1 file001.htm SCHRODER SERIES TRUST - FORM N-1/A



    As filed with the Securities and Exchange Commission on February 25, 2005

   Investment Company Act File No. 811-7840; Securities Act File No. 33-65632

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM N-1A

           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

                       POST-EFFECTIVE AMENDMENT No. 24 [X]

                                     and/or
         REGISTRATION STATEMENT UNDER INVESTMENT COMPANY ACT OF 1940 [X]

                              Amendment No. 26 [X]


                              SCHRODER SERIES TRUST
             875 Third Avenue, 22nd Floor, New York, New York 10022
                                 (212) 641-3800


                             Carin F. Muhlbaum, Esq.
                Schroder Investment Management North America Inc.
                          875 Third Avenue, 22nd Floor,
                            New York, New York 10022


                                   Copies to:

                            Timothy W. Diggins, Esq.
                                  Ropes & Gray
                             One International Place
                        Boston, Massachusetts 02110-2624


 It is proposed that this filing will become effective (check appropriate box):
 [_] Immediately upon filing pursuant    [X]  On March 1, 2005 pursuant to
      to paragraph (b)                        paragraph (b)
 [_]  60 days after filing pursuant      [_]  On (date) pursuant to
      to paragraph (a)(1)                     paragraph (a)(1)
 [_]  75 days after filing pursuant      [_]  On (date) pursuant to paragraph
      to paragraph (a)(2)                     (a)(2) of Rule 485.

If appropriate, check the following box:
 [_]  This post-effective amendment designates a new effective date for a
      previously filed post-effective amendment.


APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC As soon as
practicable after this registration statement becomes effective.

This post-effective amendment is being filed to make changes in the nature of an
annual update to a prospectus and statement of additional information used to
offer classes of securities of the Registrant's Schroder Municipal Bond Fund and
Schroder Short-Term Municipal Bond Fund. Thus, except as otherwise specifically
indicated, this amendment does not delete or supersede any prospectus or
statement of additional information relating to any other series of the Trust.

[LOGO OMITTED]
SCHRODERS
--------------------------------------------------------------------------------

PROSPECTUS
MARCH 1, 2005

SCHRODER MUNICIPAL BOND FUND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Investor Shares

This Prospectus describes two mutual funds offered by Schroder Series Trust (the
"Trust").

SCHRODER MUNICIPAL BOND FUND seeks a high level of income exempt from
regular federal income tax, consistent with the preservation of capital.
The Fund invests primarily in investment grade municipal bonds that pay
interest which is exempt from federal income tax. The Fund intends to
maintain a dollar-weighted average portfolio maturity of five to ten
years, although it may invest in securities of any maturity.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND seeks a high level of income
exempt from regular federal income tax, consistent with the preservation
of capital. The Fund invests primarily in investment grade short-term
municipal bonds that pay interest which is exempt from federal income tax.
The Fund intends to maintain a dollar-weighted average portfolio maturity
of not more than three years, although it may invest in securities of any
maturity.

Each of the Funds may invest a portion of its assets in securities paying
interest that is not exempt from federal income tax.

This Prospectus explains what you should know about the Funds before you invest.
Please read it carefully. You can call the Schroder Mutual Funds at (800)
464-3108 to find out more about the Funds and other funds in the Schroder family
of funds. From outside the United States, please call collect to (617) 483-5000
and ask to speak with a representative of the Schroder Mutual Funds.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

SCHRODER SERIES TRUST

TABLE OF CONTENTS

PAGE
----

SUMMARY INFORMATION...................................................... 3
Schroder Municipal Bond Fund......................................... 3
Schroder Short-Term Municipal Bond Fund.............................. 5
FEES AND EXPENSES........................................................ 7
PRINCIPAL RISKS OF INVESTING IN THE FUNDS................................ 8
NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES....................... 12
MANAGEMENT OF THE FUNDS.................................................. 13
HOW THE FUNDS' SHARES ARE PRICED......................................... 14
HOW TO BUY SHARES........................................................ 15
HOW TO SELL SHARES....................................................... 17
EXCHANGES................................................................ 18
DIVIDENDS AND DISTRIBUTIONS.............................................. 18
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES........................ 19
PAYMENT OF FEES.......................................................... 19
TAXES.................................................................... 20
DISCLOSURES OF FUND PORTFOLIO INFORMATION................................ 21
FINANCIAL HIGHLIGHTS..................................................... 21
USA PATRIOT ACT.......................................................... 22

-2-

SUMMARY INFORMATION

This summary provides a brief description of the Funds' investment objectives,
principal investment strategies, and principal risks.

The summary for each Fund includes a bar chart that shows the investment return
of the Fund's Investor Shares for each full calendar year since the Fund
commenced operations. The table following each bar chart shows how a Fund's
average annual return for the last year (the life of the Fund) compares to a
broad-based securities market index. The bar chart and table provide some
indication of the risks of investing in a Fund by comparing the Fund's
performance to a broad measure of market performance.

SCHRODER MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of current income exempt from
federal income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);

o are investment-grade in quality; and

o have intermediate to long-term effective maturities (three years or
longer) (a bond's effective maturity is generally shorter than its
stated maturity due to several factors, including, for example,
prepayment patterns, call dates, and put features).

"Municipal bonds" are debt obligations of any maturity issued by a state, its
political subdivisions (for example, counties, cities, towns, villages,
districts, and authorities), and their agencies, instrumentalities, or other
governmental units, the interest from which is, in the opinion of bond counsel,
exempt from federal income tax.

The Fund intends to maintain a dollar weighted average effective portfolio
maturity of five to ten years, although it may invest in securities of any
maturity. Under normal circumstances, the Fund invests at least 80% of its net
assets in municipal bonds and, as a matter of fundamental policy, under normal
circumstances, the Fund invests at least 80% of its net assets in investments
the income from which is exempt from federal income tax, but which may be
subject to federal alternative minimum tax (AMT). The Fund may invest the
remainder of its assets in taxable municipal bonds, securities issued by the
U.S. Treasury, or in taxable money market obligations. The Fund may purchase
securities on a delayed delivery or when-issued basis.

Debt securities in which the Fund invests may include securities that pay
interest at fixed rates or at floating or variable rates; payments of principal
or interest may be made at fixed intervals or only at maturity or upon the
occurrence of stated events or contingencies.

The Fund's adviser allocates the Fund's assets among different issuers, states,
market sectors (for example, general obligation securities of specific states or
securities financing specific projects), and maturities based on its view of
their relative values.

The Fund may invest more than 25% of its assets in one or more sectors of the
municipal bond market - that is, in a group of issuers that finance similar
projects - including education, health care, housing, transportation, and
utilities sectors or in obligations of issuers in any state. In managing the
Fund, the Fund's adviser generally relies on detailed proprietary research. The
Fund's adviser focuses on the securities and sectors it believes are undervalued
relative to the market, rather than relying on interest rate forecasts.

-3-

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a prerefunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

The Fund's adviser may sell a security for the Fund if the security reaches the
adviser's target price or if the adviser's credit outlook for the security has
deteriorated. The Fund's adviser may also sell a security to facilitate the
purchase of a security it believes is more attractive for the Fund.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The municipal bond market is
volatile and can be significantly affected by adverse tax,
legislative, or political changes and the financial condition of the
issuers of municipal bonds.

o INTEREST RATE RISK. Interest rate increases can cause the price of a
debt security to decrease. In addition, if a security is prepaid in a
period of falling interest rates, the Fund may have to reinvest the
proceeds in lower-yielding investments. Interest rate risk is
generally greater in the case of securities with longer maturities and
in the case of portfolios of securities with longer average
maturities.

o CREDIT RISK. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal on the
security will affect the value of the security.

o INFLATION/DEFLATION RISK. Inflation risk is the risk that the value of
the Fund's investments may decline as inflation decreases the value of
money. Deflation risk is the risk that prices throughout the economy
may decline over time, which may have an adverse effect on the
creditworthiness of issuers in whose securities the Fund invests.

o CONCENTRATION RISK. Investing in bonds issued by a state or by state
agencies or political subdivisions in the same state may make a Fund
more vulnerable to that state's economy and to issues affecting its
municipal bond issuers. Geographic or sector concentration may cause
the value of the Fund's shares to change more than the value of shares
of funds that invest in a greater variety of investments. The Fund may
also invest a substantial portion of its assets in a particular issue,
and to that extent the Fund's investment performance and net asset
value will be adversely affected by a decrease in the value of that
issue more than if such Fund invested in a greater number of
securities.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The adviser and the Fund's portfolio managers
will apply investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that
these will produce the desired results.

-4-

Performance Information.

[GRAPHIC OMITTED]

3.70%

2004

During the periods shown above, the highest quarterly return was 3.12% for the
quarter ended September 30, 2004, and the lowest was -1.70% for the quarter
ended June 30, 2004.

------------------------------------------------------------ ----------------------------------
AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2004) (Life of the Fund)
------------------------------------------------------------ ----------------------------------

Schroder Municipal Bond Fund
------------------------------------------------------------ ----------------------------------
Return Before Taxes 3.70%
------------------------------------------------------------ ----------------------------------
Return After Taxes on Distributions (1) 3.64%
------------------------------------------------------------ ----------------------------------
Return After Taxes on Distributions and Sale of Fund 3.35%
Shares (1)
------------------------------------------------------------ ----------------------------------
Lehman Brothers Municipal Bond 5-Year Index (2) (reflects 2.71%
no deduction for fees, expenses or taxes)
------------------------------------------------------------ ----------------------------------

(1) After tax returns are estimated using the highest historical individual
federal margin income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown. After-tax returns are not
relevant to investors who hold their shares in the Fund through
tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases, the return after taxes may exceed
the return before taxes due to an assumed tax benefit from any losses
on a sale of Fund shares at the end of the measurement period.

(2) The Lehman Brothers Municipal Bond 5-Year Index is a rules-based,
market-value-weighted unmanaged index of debt obligations issued by
municipalities with an approximate maturity of five years.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of income exempt from federal
income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);
o are investment-grade in quality; and
o have effective maturities of no more than three years (a bond's
effective maturity is generally shorter than its stated maturity due
to several factors, including, for example, prepayment patterns, call
dates, and put features).

The Fund intends to maintain a dollar weighted average effective portfolio
maturity of not more than three years, although it may invest in securities of
any maturity. Under normal circumstances, the Fund invests at least 80% of its
net assets in municipal bonds and, as a matter of fundamental policy, under
normal circumstances, the Fund invests at least 80% of its net assets in
investments the income from which is exempt from federal income tax, but which
may be subject to federal alternative minimum tax (AMT). The

-5-

Fund may invest the remainder of its assets in taxable municipal bonds,
securities issued by the U.S. Treasury, or in taxable money market obligations.
The Fund may purchase securities on a delayed delivery or when issued basis.

The Fund may invest more than 25% of its assets in one or more sectors of the
municipal bond market - that is, in a group of issuers that finance similar
projects - including education, health care, housing, transportation, and
utilities sectors or in obligations of issuers in a particular state. In
managing the Fund, the Fund's adviser generally relies on detailed proprietary
research. The Fund's adviser focuses on the securities and sectors it believes
are undervalued relative to the market, rather than relying on interest rate
forecasts.

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a prerefunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o CREDIT RISK. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal on the
security will affect the value of the security.

-6-

the economy may decline over time, which may have an adverse effect on
the creditworthiness of issuers in whose securities the Fund invests.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The adviser and the Fund's portfolio managers will apply
investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that these will produce
the desired results.

Performance Information.

[GRAPHIC OMITTED]

1.79%

2004

During the periods shown above, the highest quarterly return was 1.36% for the
quarter ended September 30, 2004, and the lowest was -0.84% for the quarter
ended June 30, 2004.

------------------------------------------------------------ ----------------------------
AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2004) (Life of the Fund)
------------------------------------------------------------ ----------------------------

Schroder Short-Term Municipal Bond Fund
------------------------------------------------------------ ----------------------------
Return Before Taxes 1.79%
------------------------------------------------------------ ----------------------------
Return After Taxes on Distributions (1) 1.72%
------------------------------------------------------------ ----------------------------
Return After Taxes on Distributions and Sale of Fund 1.79%
Shares (1)
------------------------------------------------------------ ----------------------------
Lehman Brothers Municipal Bond 1-Year Index (2) (reflects 1.04%
no deduction for fees, expenses or taxes)
------------------------------------------------------------ ----------------------------

(2) The Lehman Brothers Municipal Bond 1-Year Index is an unmanaged
rules-based, market-value-weighted index of debt obligations issued by
municipalities with short-term maturities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
INVESTOR SHARES OF THE FUNDS.

SHAREHOLDER FEES (paid directly from your investment):

Maximum Sales Load Imposed on Purchases............................ None

-7-

Maximum Deferred Sales Load........................................ None
Maximum Sales Load Imposed on Reinvested Dividends................. None
Redemption Fee..................................................... None
Exchange Fee....................................................... None

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):

----------------------------- ------------------ -------------------
SCHRODER SCHRODER
MUNICIPAL BOND SHORT-TERM
FUND MUNICIPAL BOND FUND
----------------------------- ------------------ -------------------
Management Fees 0.40% 0.40%
----------------------------- ------------------ -------------------
Distribution (12b-1) Fees None None
----------------------------- ------------------ -------------------
Other Expenses 1.01% 0.90%
----------------------------- ------------------ -------------------
Total Annual Fund Operating 1.41% 1.30%
Expenses
----------------------------- ------------------ -------------------
Less: Fee Waiver
and/or Expense (0.86)% (0.75)%
Limitation(1)
----------------------------- ------------------ -------------------
Net Expenses(1) 0.55% 0.55%
----------------------------- ------------------ -------------------

(1) The Net Expenses shown for each Fund reflect the effect of
contractually imposed fee waivers and/or expense limitations, on the Total
Annual Fund Operating Expenses of the Fund. In order to limit the expenses
of each Fund's Investor Shares, the Fund's adviser is contractually
obligated to reduce its compensation and, if necessary, to pay certain
other Fund expenses until February 28, 2006 to the extent that the Total
Annual Fund Operating Expenses of the Fund allocable to its Investor Shares
exceeds the annual rate of 0.55% of the average daily net assets
attributable to a Fund's Investor Shares.

EXAMPLE

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Investor Shares of a Fund for the
time periods indicated and then redeem all of your Investor Shares at the end of
those periods. The Example also assumes that your investment earns a 5% return
each year and that the Fund's operating expenses for each year are the same as
the Fund's Total Annual Fund Operating Expenses shown above (except that, in the
first year, the operating expenses are the same as the Fund's Net Expenses shown
above). Your actual costs may be higher or lower. Based on these assumptions,
your costs would be:

---------------------------------------- -------------------- ------------------ ------------------ -----------------
1 Year 3 Years 5 Years 10 Years
---------------------------------------- -------------------- ------------------ ------------------ -----------------

Schroder Municipal Bond Fund $56 $361 $689 $1,616
---------------------------------------- -------------------- ------------------ ------------------ -----------------
Schroder Short-Term Municipal Bond Fund $56 $338 $641 $1,502
---------------------------------------- -------------------- ------------------ ------------------ -----------------

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

A Fund may not achieve its objective(s) in all circumstances. The following
provides more detail about certain of the principal risks of investing in a Fund
and the circumstances which could adversely affect the value of a Fund's shares
or its investment return. Each of the risks described below applies to both
Funds.

-8-

o MUNICIPAL BONDS. Municipal bonds are investments of any maturity issued by
states, public authorities or political subdivisions to raise money for public
purposes; they include, for example, general obligations of a state or other
government entity supported by its taxing powers to acquire and construct public
facilities or to provide temporary financing in anticipation of the receipt of
taxes and other revenue. They also include obligations of states, public
authorities or political subdivisions to finance privately owned or operated
facilities or public facilities financed solely by enterprise revenues. Changes
in law or adverse determinations by the Internal Revenue Service or a state tax
authority could make the income from some of these obligations taxable.

General obligations. These are backed by the issuer's authority to
levy taxes and are considered an obligation of the issuer. They are
payable from the issuer's general unrestricted revenues, although
payment may depend upon government appropriation or aid from other
governments. These investments may be vulnerable to legal limits on
a government's power to raise revenue or increase taxes, as well as
economic or other developments that can reduce revenues.

Special revenue obligations. These are payable from revenue earned
by a particular project or other revenue source. They include
private activity bonds for manufacturing facilities, certain
transportation facilities, and publicly-owned utilities, and
non-profit organizations such as private colleges, hospitals and
museums, and other facilities. Investors can look only to the
revenue generated by the project or the private company owning or
operating the project rather than the credit of the state or local
government authority issuing the bonds. Revenue obligations are
often subject to greater credit risk than general obligations debt
because they do not rely on broad taxing powers.

Municipal bonds may be insured or guaranteed by public or private guarantors or
insurers. The credit standing of such a bond would likely depend to a
substantial extent on the ability and willingness of the guarantor or insurer to
meet its obligations.

The amount of public information available about the municipal bonds in a Fund's
portfolio is generally less than that available for corporate equities or bonds,
and the investment performance of a Fund holding such securities may therefore
be more dependent on the analytical abilities of the Funds' adviser.

Interest income from private activity bonds may be subject to federal AMT for
individuals. Corporate shareholders will be required to include all tax-exempt
interest dividends in determining their federal AMT. The Funds may each invest
as much as 100% of their net assets in investments the income from which may
result in liability for federal AMT both for individual and corporate
shareholders. For more information, including possible state, local and other
taxes, contact your tax advisor.

At times, a portion of a Fund's assets may be invested in an issue of which the
Fund, by itself or together with other funds and accounts managed by the Fund's
adviser or its affiliates, holds all or a major portion. Although the Funds'
adviser generally considers such securities to be liquid because of the
availability of an institutional market for such securities, it is possible
that, under adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer, the Fund could find it more
difficult to sell these securities when the Funds' adviser believes it advisable
to do so or may be able to sell the securities only at prices lower than if they
were more widely held. Under these circumstances, it may also be more difficult
to determine the fair value of such securities for purposes of computing a
Fund's net asset value. In the event of a default by an issuer of such
securities, the Fund may be required to incur expenses in enforcing its rights,
and any income received by the Fund in respect of its investment might not be
tax-exempt.

-9-

o TAXABLE MUNICIPAL SECURITIES. The Funds may invest in taxable municipal
securities. These would typically include securities issued by states, public
authorities, or political subdivisions but which fail to meet the requirements
of the federal tax code necessary so that interest payments made on the
securities will be exempt from federal income tax. These may include, for
example, securities issued to finance unfunded pension liabilities or issued to
finance governmental facilities where the nature or management of the facility
is such that the securities may not be issued on a tax-exempt basis. The Funds
may also hold a portion of their assets in securities issued by the U.S.
Treasury and they may hold taxable money-market securities or cash equivalents
for liquidity or pending investment in tax-exempt securities.

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The values of municipal bonds may
rise or fall in response to a number of factors affecting their issuers
specifically or the municipal bond market generally. For example, political or
fiscal events affecting the issuers of municipal bonds, as well as uncertainties
in the municipal bond market generally related to taxation, legislative changes,
or the enforceability of rights of municipal bond holders, can significantly
affect the values of municipal bonds. Because many municipal bonds are issued to
finance similar projects, such as those relating to education, health care,
housing, transportation, and utilities, conditions in those sectors can affect
the overall municipal bond market.

o INTEREST RATE RISK. The values of bonds and other debt instruments usually
rise and fall in response to changes in interest rates. Declining interest rates
generally increase the values of existing debt instruments, and rising interest
rates generally reduce the value of existing debt instruments. Interest rate
risk is generally greater for investments with longer durations. Some
investments give the issuer the option to call or redeem an investment before
its maturity date. If an issuer calls or redeems an investment during a time of
declining interest rates, a Fund might have to reinvest the proceeds in an
investment offering a lower yield, and therefore might not benefit from any
increase in value as a result of declining interest rates.

o CREDIT RISK. The ability, or perceived ability, of the issuer of a debt
security to make timely payments of interest and principal on the security will
affect the value of the security. It is possible that the ability of an issuer
to meet its obligations will decline substantially during the period when a Fund
owns securities of that issuer, or that the issuer will default on its
obligations. An actual or perceived deterioration in the ability of an issuer to
meet its obligations will likely have an adverse effect on the value of the
issuer's securities.

The value of a municipal bond depends on the ability and willingness of its
issuer to meet its obligations on the security. Changes in the financial
condition of an issuer, changes in specific economic or political conditions
that affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or value of an
issuer's securities. The discontinuance of the taxation supporting a specific
project or specific assets or the inability to collect revenues from the project
or from the assets can negatively affect the municipal bonds backed by current
or anticipated revenues from the project or assets. If the Internal Revenue
Service or a state tax authority determines an issuer of a municipal security
has not complied with applicable tax requirements, interest from the security
could become taxable for federal or state law purposes and the security's market
value could decline significantly.

Each of the Funds invests principally in securities of "investment grade" at the
time of purchase, which means either that a nationally recognized statistical
rating organization (for example, Moody's Investor Service, Inc., Standard &
Poor's, or Fitch Investors Service, Inc.), has rated the securities Baa3 or BBB-
(or the equivalent) or better, or the Funds' investment adviser has determined
the securities to be of comparable quality. If a security has been rated by more
than one nationally recognized statistical rating organization, the Funds'
adviser will consider the highest rating for the purposes of determining whether
the security is "investment grade." A Fund will not necessarily dispose of a
security held by it if its rating falls below investment grade, although the
Fund's adviser will consider whether the security continues to be an appropriate
investment for the Fund. Each Fund considers whether a security is "investment
grade" only at the time of purchase.

-10-

Credit risk is generally greater for investments issued at less than their face
values and required to make interest payments only at maturity rather than at
intervals during the life of the investment. Credit rating agencies base their
ratings largely on the issuer's historical financial condition and the rating
agencies' investment analysis at the time of rating. The rating assigned to any
particular investment does not necessarily reflect the issuer's current
financial condition, and does not reflect an assessment of an investment's
volatility or liquidity. Although investment-grade investments generally have
lower credit risk than investments rated below investment grade, they may share
some of the risks of lower-rated investments, including the possibility that the
issuers may be unable to make timely payments of interest and principal and thus
default.

o INFLATION/DEFLATION RISK. Inflation risk is the risk that a Fund's assets or
income from a Fund's investments may be worth less in the future as inflation
decreases the value of money. As inflation increases, the real value of a Fund's
portfolio could decline. Deflation risk is the risk that prices throughout the
economy may decline over time - the opposite of inflation. Deflation may have an
adverse effect on the creditworthiness of issuers and may make issuer default
more likely, which may result in a decline in the value of a Fund's portfolio.

o CONCENTRATION OF INVESTMENTS. A Fund may invest without limitation in the debt
of issuers, including conduit issuers, located in the same state. Investing in
bonds issued by a state, state agencies, or political subdivisions in the same
state may make a Fund more vulnerable to that state's economy and to issues
affecting its municipal bond issuers, such as possible restrictions on
additional borrowings by issuers in that state or economic or legal limitations
on an issuer's ability to meet payment obligations. A Fund may also invest more
than 25% of its assets in a sector of the municipal bond market, including
education, health care, housing, transportation or utilities sectors. Geographic
or sector concentration may cause the value of a Fund's shares to change more
than the values of shares of funds that invest in a greater variety of
investments.

Municipal bonds backed by revenues from facilities in a particular sector are
subject to the risks of investment in that sector generally. For example,
investments in many of the sectors in which a Fund may invest are subject to the
risks of changes in government regulation, fluctuations in revenues, including
federal or state assistance, competition, changes in labor relations and costs,
and difficulties in raising additional capital under a variety of circumstances.
Revenue bonds issued in the education sector can be significantly affected also
by levels of endowment, charitable giving, costs of attendance, increases or
decreases in governmental assistance or other revenues, and, in the case of
public schools, limits on the ability of governmental entities to increase taxes
or generate other revenues, including fees, to pay for educational expenses.
Investments in a health care sector are subject to changes in patient income,
the availability of public or private insurance reimbursement for procedures and
drug costs, the timing of such payments, the quality of management and the
availability of qualified professional staff, and demographics. The housing
sector can be significantly affected by changes in interest rates for
single-family home buyers, governmental regulations imposed on developers of low
and moderate cost multi-family units, as well as costs of land, construction and
maintenance costs, neighborhood opposition to mixed-income developments, and the
level of government incentives, including subsidies and tax credits. Investments
in a transportation sector can be affected significantly by the cost of
developing, maintaining, updating and replacing infrastructure and other hard
assets, levels of federal and state assistance, quality of service, and the
ability to raise fees without losing ridership. Investments in a utilities
sector can be significantly affected by the ability to locate a reliable and
reasonable source of the resource to be provided, infrastructure development and
maintenance, the ability to pass on costs of services and resources to
customers, mandatory or voluntary natural resource conservation efforts,
alternatives by customers to the use of public utilities, and the effects of
deregulation by many states. The foregoing factors are illustrative in nature.
This discussion of the risk of concentration in sectors is not, and is not
intended to be, comprehensive or exhaustive.

A Fund may at times invest a substantial portion of its assets in securities of
a particular issue, and to that extent, the Fund's investment performance and
net asset value will be adversely affected by decreases in the value of such
issue more than if such Fund invested in a larger range of securities.

o MANAGEMENT RISK. Because each Fund is actively managed, its investment return
depends on the ability of its adviser to manage its portfolio successfully. The
adviser and the Fund's portfolio managers will apply investment techniques and
risk analyses in making investment decisions for the Funds, but there can be no
guarantee that these will produce the desired results.

-11-

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the Summary
Information section above, each Fund may at times, but is not required to, use
the strategies and techniques described below, which involve certain special
risks. This Prospectus does not attempt to disclose all of the various
investment techniques and types of securities that the Funds' investment adviser
might use in managing the Funds. As in any mutual fund, investors must rely on
the professional investment judgment and skill of the Funds' adviser.

o When-issued and delayed delivery securities. A Fund may purchase securities
on a when-issued, delayed delivery, or forward commitment basis. These
transactions involve a commitment by a Fund to purchase a security for a
predetermined price or yield, with payments and delivery taking place more than
seven days in the future, or after a period longer than the customary settlement
period for that type of security. These transactions may increase the overall
investment exposure for the Fund and involve a risk of loss if the value of the
securities declines prior to the settlement date.

o Temporary defensive strategies. At times, the Funds' investment adviser may
judge that conditions in the securities markets make pursuing a Fund's basic
investment strategy inconsistent with the best interests of its shareholders. At
such times, the adviser may, but is not required to, temporarily use alternate
investment strategies primarily designed to reduce fluctuations in the value of
the Fund's assets. In implementing these "defensive" strategies, the adviser
would invest in high quality fixed income securities (including taxable
obligations), cash or money market instruments the adviser considers consistent
with such defensive strategies. It is impossible to predict when, or for how
long, a Fund would use these alternate strategies. One risk of taking such
temporary defensive positions is that the Fund may not achieve its investment
objective(s).

o Pricing. At times market conditions might make it hard to value some
investments. If a Fund has valued securities it holds too high, you may end up
paying too much for the Fund's shares when you buy into a Fund. If a Fund
underestimates the price of its portfolio securities, you may not receive the
full market value for your Fund shares when you sell. To the extent a Fund
relies on a pricing service to value some or all of its portfolio securities, it
is possible that the pricing information provided by the service will not
reflect the actual price the Fund would receive upon a sale of the security.

o Other investments. A Fund may also invest in other types of securities and
utilize a variety of investment techniques and strategies that are not described
in this Prospectus. These securities and techniques may subject the Fund to
additional risks. Please see the Statement of Additional Information for
additional information about the securities and investment techniques described
in this Prospectus and about additional techniques and strategies that may be
used by a Fund. Although each Fund expects to invest primarily in municipal
bonds, either Fund may invest the remainder of its assets in other types of debt
securities or money market instruments, the income from which may be fully
taxable.

o Portfolio turnover. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements, in order to
take advantage of what the Funds' adviser believes to be temporary disparities
in normal yield relationships between securities. A change in the securities
held by the Fund is known as "portfolio turnover." Portfolio turnover generally
involves some expense to a Fund, including bid-asked spreads, dealer mark-ups
and other transaction costs on the sale of securities and reinvestments in other
securities, and may result in the realization of taxable capital gains
(including short-term gains, which are generally taxed to shareholders at
ordinary income rates). The trading costs and tax effects associated with
portfolio turnover may adversely affect a Fund's performance. During periods
when a Fund experiences high portfolio turnover rates, these effects are likely
to be more pronounced. The Funds' adviser currently expects that the portfolio
turnover rate for the current fiscal year will not exceed 100% for each of the
Funds. Consult your tax advisor regarding the tax effect of a Fund's portfolio
turnover rate on your investment.

-12-

o Changes in investment objectives and policies. The investment policy of
each Fund requiring it to invest, under normal circumstances, at least 80% of
its net assets in investments the income from which is exempt from federal
income tax (but which may be subject to federal AMT) may be changed only with
the approval of a "majority of the outstanding voting securities" of the
relevant Fund (which means the lesser of (1) more than 50% of the outstanding
shares of the Fund, or (2) 67% or more of the shares of the Fund present at a
meeting if more than 50% of the outstanding shares are represented in person or
by proxy). The investment policy of each Fund requiring it to invest at least
80% of their net assets in municipal bonds may be changed by the Board of
Trustees without shareholder approval after providing shareholders of the
relevant Fund 60 days written notice. The Trustees may change the investment
objectives and other policies of each Fund without a vote of the shareholders.

o Percentage investment limitations. Unless otherwise noted, all percentage
limitations on Fund investments will apply at the time of investment. A Fund
will not consider an investment to violate these limitations unless an excess or
deficiency were to occur or exist immediately after and as a result of an
investment. References in any of the discussions of a Fund's investment policies
to 80% of a Fund's net assets refer to that percentage of the aggregate of the
Fund's net assets and the amount, if any, of borrowings by the Fund for
investment purposes.

MANAGEMENT OF THE FUNDS

A Board of Trustees governs the Trust. The Board of Trustees has retained
Schroder Investment Management North America Inc. ("Schroders") to manage the
investments of each Fund. Subject to the control of the Trustees, Schroders also
manages the Funds' other affairs and business.

Schroders (itself and its predecessors) has been an investment manager since
1962, and currently serves as investment adviser to the Funds, other mutual
funds, and a broad range of institutional investors. Schroders' ultimate parent,
Schroders plc, and its affiliates currently engage in the asset management
business, and as of June 30, 2004 had in the aggregate assets under management
of approximately $181 billion.

o INVESTMENT ADVISORY FEES. Each Fund pays an investment advisory fee to
Schroders at the annual rate of 0.40% of the Fund's average daily net assets.

o EXPENSE LIMITATIONS AND WAIVERS. In order to limit the expenses of the
Funds' Investor Shares, Schroders is contractually obligated to reduce its
compensation and, if necessary, to pay certain other Fund expenses until
February 28, 2006 to the extent that the Total Annual Fund Operating Expenses of
a Fund allocable to its Investor Shares exceeds the annual rate of 0.55% of the
average daily net assets attributable to such Fund's Investor Shares. Only the
Board of Trustees of the Trust may terminate this contractual obligation prior
to February 28, 2006.

o PORTFOLIO MANAGEMENT. The following portfolio managers at Schroders have
primary responsibility for making investment decisions for the Funds since the
years shown below.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE

David Baldt, CFA Inception (December 2003) Lead portfolio manager for each of
the Funds. Employed as an
investment Fund professional at
Schroders since fall 2003. Mr.
Baldt is an Executive Vice President
of Schroders. Previously, he was a
Managing

-13-

Director of Deutsche Asset
Management (formerly Morgan
Grenfell) since 1989.

Daniel Scholl Inception (December 2003) Employed as an investment Fund
professional at Schroders since fall
2003. Mr. Scholl is a Senior Vice
President of Schroders. Previously,
he was a Director and Portfolio
Manager of Deutsche Asset Management
(formerly Morgan Grenfell) since
1998.

Susan Beck Inception (December 2003) Employed as an investment Fund
professional at Schroders since fall
2003. Ms. Beck is a First Vice
President of Schroders. Previously,
she was a Vice President and
Portfolio Manager of Deutsche Asset
Management (formerly Morgan
Grenfell) since 1989.

Ted Manges Inception (December 2003) Employed as an investment Fund
professional at Schroders since fall
2003. Mr. Manges is a First Vice
President of Schroders. Previously
he was a Vice President of Deutsche
Asset Management (1999-2003), and
Manager of Trading and Sales,
Commerce Capital Markets (1995-1999).

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Investor Shares by dividing the
total value of its assets attributable to its Investor Shares, less its
liabilities attributable to those shares, by the number of Investor Shares
outstanding. Each Fund values its Investor Shares as of the close of trading on
the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each day the
Exchange is open. The Trust expects that days, other than weekend days, when the
Exchange will not be open are New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Each Fund values its portfolio securities
for which market quotations are readily available at market value. Investments
and assets for which market values are not readily available are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, generally by reference to other securities or indexes. For
example, most of the Funds' investments are currently valued using one or more
pricing services that recommend fair values based generally on prices of
comparable securities (or, when such prices are not available, based on other
factors that may be indicative of the securities' values). Short-term
investments that will mature within 60 days are valued by Schroders using
amortized cost, a form of fair valuation, pursuant to procedures adopted by the
Board of Trustees. The net asset value of each Fund's Investor Shares may differ
from that of its Advisor Shares due to differences in the expenses of Investor
Shares and Advisor Shares.

-14-

HOW TO BUY SHARES

The Trust, through its distributor, Schroder Fund Advisors Inc., sells Investor
Shares of each Fund at their net asset value without any sales charges or loads,
so that the full amount of your purchase payment is invested in the Fund you
select.

You may purchase Investor Shares of a Fund by completing the Account Application
that accompanies this Prospectus, and sending payment by check or wire as
described below. Acceptance of your order may be delayed pending receipt of
additional documentation, such as copies of corporate resolutions and
instruments of authority, from corporations, administrators, executors, personal
representatives, directors, or custodians.

Each Fund sells its Investor Shares at their net asset value next determined
after the applicable Fund or its transfer agent, Boston Financial Data Services,
Inc. ("BFDS"), receives your request in good order (meaning that the request
meets the requirements set out below and in the Account Application, and
otherwise meets the requirements implemented from time to time by the Funds'
transfer agent or the Fund). In order for you to receive a Fund's next
determined net asset value, the Fund or BFDS must receive your order before the
close of trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
Time). The Trust reserves the right to reject any order to purchase Investor
Shares of a Fund.

The minimum investments for initial and additional purchases of Investor Shares
of each Fund are as follows:

INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
---------- -----------
Regular Accounts $100,000 $10,000

The Trust may, in its sole discretion, waive these minimum initial or subsequent
investment amounts for share purchases by: an employee of Schroders, any of its
affiliates or a financial intermediary authorized to sell shares of the Funds,
or such employee's spouse or life partner, or children or step-children age 21
or younger; investment advisory clients of Schroders; and current or former
Trustees. For share purchases made through certain fund networks or other
financial intermediaries, the investment minimums associated with the policies
and programs of the fund network or financial intermediary will apply.

The Funds do not issue share certificates.

The Trust may suspend the offering of Investor Shares of a Fund for any period
of time. The Trust may change any investment minimum from time to time.

Purchases by check. You may purchase Investor Shares of a Fund by mailing a
check (in U.S. dollars) payable to the Fund in which you wish to invest. If you
wish to purchase Investor Shares of two or more Funds, make your check payable
to Schroder Mutual Funds and include written instructions as to how the amount
of your check should be allocated among the Funds whose shares you are
purchasing. Schroder Mutual Funds will not accept third-party checks. You should
direct your check and your completed Account Application as follows:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184

For initial purchases, a completed Account Application must accompany your
check.

-15-

Purchases by bank wire. If you make your initial investment by wire, a completed
Account Application must precede your order. Upon receipt of the Application,
BFDS will assign you an account number. BFDS will process wire orders received
prior to the close of trading on the New York Stock Exchange (normally 4:00
p.m., Eastern Time) on each day the Exchange is open for trading at the net
asset value next determined as of the end of that day. BFDS will process wire
orders received after that time at the net asset value next determined
thereafter.

Please call BFDS at (800) 464-3108 to give notice that you will send funds by
wire, and obtain a wire reference number. (From outside the United States,
please call collect to (617) 483-5000 and ask to speak with a Schroder Mutual
Funds representative.) Please be sure to obtain a wire reference number.
Instruct your bank to wire funds with the assigned reference number as follows:

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

ABA No.: 011000028
Attn: Schroder Mutual Funds
DDA No.: 9904-650-0
FBO: Account Registration
A/C: Mutual Fund Account Number
Name of Fund

BFDS will not process your purchase until it receives the wired funds.

Automatic purchases. You can make regular investments of $100 or more per month
or quarter in Investor Shares of a Fund through automatic deductions from your
bank account. Please complete the appropriate section of the Account Application
if you would like to utilize this option. For more information, please call
(800) 464-3108.

Brokers and other financial institutions. You may also buy, redeem, and exchange
Investor Shares of a Fund through an authorized broker or other financial
institution that has an agreement with Schroders or Schroder Fund Advisors Inc.
The purchase, redemption and exchange policies and fees charged such brokers and
other institutions may be different than those of the Funds. For instance,
banks, brokers, retirement plans and financial advisers may charge transaction
fees and may set different investment minimums or limitations on buying,
exchanging, or redeeming Investor Shares. Please consult a representative of
your financial institution for further information.

Certain brokers or other financial institutions may accept purchase and
redemption orders for Investor Shares on behalf of a Fund. Such brokers or
financial institutions may designate other intermediaries to accept purchase and
redemption orders on behalf of a Fund. For purposes of pricing, a Fund may be
deemed to have received a purchase or redemption order when an authorized broker
or financial institution or, if applicable, a broker or financial institution's
authorized designee, receives the order. Agreements between such brokers or
financial institutions and Schroder Fund Advisors Inc., the Trust's distributor,
provide that these orders would be priced at the Fund's net asset value next
determined after they are received by the broker or financial institution or
authorized designee.

Brokers or other agents may charge investors a fee for effecting transactions in
shares of a Fund, in addition to any fees the Funds charge.

Purchases in-kind. Investors may purchase Investor Shares of a Fund for cash or
in exchange for securities, subject to the determination by Schroders in its
discretion that the securities are acceptable. (For purposes of determining
whether securities will be acceptable, Schroders will consider, among other
things, whether they are liquid securities of a type consistent with the
investment objectives and policies of the Fund and have a readily ascertainable
value.) If a Fund receives securities from an investor in

-16-

exchange for Investor Shares of the Fund, the Fund will under some circumstances
have the same tax basis in the securities as the investor had prior to the
exchange (and the Fund's gain for tax purposes would be calculated with regard
to the investor's tax basis), and in such cases the Fund's holding period in
those securities would include the investor's holding period. Any gain on the
sale of securities received in exchange for Investor Shares of a Fund would be
subject to distribution as capital gain to all of the Fund's shareholders. (In
some circumstances, receipt of securities from an investor in exchange for
Investor Shares of a Fund may be a taxable transaction to the investor, in which
case the Fund's tax basis in the securities would reflect the fair market value
of the securities on the date of the exchange, and its holding period in the
securities would begin on that date.) Each Fund values securities accepted by
Schroders in the same manner as are the Fund's portfolio securities as of the
time of the next determination of the Fund's net asset value. Although each Fund
seeks to determine the fair value of securities contributed to the Fund, any
valuation that does not reflect fair value may dilute the interests of the
purchasing shareholder or the other shareholders of the Fund. All rights
reflected in the market price of accepted securities at the time of valuation
become the property of the Fund and must be delivered to the Fund upon receipt
by the investor. Investors may realize a taxable gain or loss upon the exchange.
Investors interested in purchases through exchange should telephone Schroders at
(800) 464-3108, their Schroders client representative, or other financial
intermediary.

Certain payments by Schroders or its affiliates. Schroder Fund Advisors Inc.,
Schroders, or their affiliates may, at their own expense and out of their own
assets, provide compensation to financial intermediaries in connection with
sales of Fund shares or shareholder servicing. In some instances, they may make
this compensation available only to certain intermediaries who have sold or are
expected to sell significant amounts of shares of a Fund. If you purchase or
sell shares through an intermediary, the intermediary may charge a separate fee
for its services. Consult your intermediary for information.

If correspondence to the shareholder's address of record is returned, then,
unless the Transfer Agent determines the shareholder's new address, the Transfer
Agent will reinvest dividends and other distributions returned to it in the
applicable Fund(s), and the checks will be canceled.

HOW TO SELL SHARES

When You May Redeem. You may sell your Investor Shares back to a Fund on any day
the New York Stock Exchange is open by sending a letter of instruction or stock
power form to Schroder Mutual Funds, or by calling BFDS at (800) 464-3108. The
price you will receive is the net asset value next determined after receipt of
your redemption request in good order by Schroder Mutual Funds or BFDS. A
redemption request is in good order if it includes the exact name in which the
shares are registered, the investor's account number, and the number of shares
or the dollar amount of shares to be redeemed, and, for written requests, if it
is signed in accordance with the account registration. A bank, broker-dealer, or
certain other financial institutions must guarantee any signature in the form of
the Stamp 2000 Medallion Guarantee. You may redeem your shares by telephone only
if you elected the telephone redemption privilege option on your Account
Application or otherwise in writing. Telephone redemption proceeds will be sent
only to you at an address on record with the Funds for at least 30 days. Unless
otherwise agreed, you may only exercise the telephone redemption privilege to
redeem shares worth not more than $50,000. The Trust may require additional
documentation from shareholders that are corporations, partnerships, agents,
fiduciaries, surviving joint owners, those acting through powers of attorney, or
similar delegation.

The Trust will pay you for your redemptions as promptly as possible and in any
event within seven days after the request for redemption is received in good
order. The Trust generally sends payment for shares on the business day after a
request is received. In case of emergencies, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law. If you paid
for your Investor Shares by check, the Trust will not send you your redemption
proceeds until the check you used to pay for the shares has cleared, which may
take up to 15 calendar days from the purchase date.

-17-

Involuntary Redemptions. If, because of your redemptions, your account balance
for a Fund falls below a minimum amount set by the Trustees (presently $2,000),
the Trust may choose to redeem your Investor Shares in that Fund and pay you for
them. You will receive at least 30 days written notice before the Trust redeems
your Investor Shares, and you may purchase additional Investor Shares at any
time to avoid a redemption. The Trust may also redeem Investor Shares if you own
shares of a Fund above a maximum amount set by the Trustees. There is currently
no maximum, but the Trustees may establish one at any time, which could apply to
both present and future shareholders.

Suspension. The Trust may suspend the right of redemption for the Fund during
any period when: (1) trading on the New York Stock Exchange is restricted, as
determined by the SEC, or the Exchange is closed; (2) the SEC has by order
permitted such suspension; or (3) an emergency (as defined by rules of the SEC)
exists, making disposal of portfolio investments or determination of the Fund's
net asset value not reasonably practicable.

Redemptions in-kind. The Trust has agreed to redeem Investor Shares of each Fund
solely in cash up to the lesser of $250,000 or 1% of the Fund's net assets
attributable to Investor Shares during any 90-day period for any one
shareholder. In consideration of the best interests of the remaining
shareholders of a Fund, the Trust may pay any redemption proceeds exceeding this
amount in whole or in part by a distribution in-kind of securities held by a
Fund in lieu of cash. The Trust does not expect to redeem Investor Shares
in-kind under normal circumstances. If the Trust redeems your Investor Shares
in-kind, you should expect to incur brokerage expenses and other transaction
costs upon the disposition of the securities you receive from the Fund. In
addition, the price of those securities may change between the time when you
receive the securities and the time when you are able to dispose of them.

General. If you request that your redemption proceeds be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each signature, by an eligible signature guarantor,
such as a member firm of a national securities exchange or a commercial bank or
trust company located in the United States. If you are a resident of a foreign
country, another type of certification may be required. For more details, please
contact BFDS at (800) 464-3108, your Schroders client representative or your
financial intermediary. The Trust may require corporations, fiduciaries, and
other types of shareholders to supply additional documents which support their
authority to effect a redemption. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, BFDS will follow reasonable
procedures to confirm that telephone instructions are genuine. BFDS and the
Trust generally will not be liable for any losses due to unauthorized or
fraudulent purchase or redemption requests, but the applicable party or parties
may be liable if they do not follow these procedures.

EXCHANGES

You can exchange your Investor Shares of a Fund for Investor Shares of other
funds in the Schroder family of funds at any time at their respective net asset
values. The Trust would treat the exchange as a sale of your Investor Shares,
and any gain on the exchange will generally be subject to tax. For a listing of
the Schroder funds available for exchange and to exchange Investor Shares,
please call (800) 464-3108. (From outside the United States, please call collect
to (617) 483-5000 and ask to speak with a representative of the Schroder Mutual
Funds.) In order to exchange shares by telephone, you must complete the
appropriate section of the Account Application. The Trust and Schroders reserve
the right to change or suspend the exchange privilege at any time. Schroders
would notify shareholders of any such change or suspension.

DIVIDENDS AND DISTRIBUTIONS

-18-

Each Fund declares dividends from net investment income daily and distributes
these dividends monthly. Each Fund distributes net realized capital gain at
least annually. Each Fund makes distributions from net capital gain after
applying any available capital loss carryovers.

Shares begin to earn dividends on the first business day following the day of
purchase. Shares earn dividends through the date of redemption.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

o Reinvest all distributions in additional Investor Shares of your Fund;

o Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Investor Shares
of your Fund;

o Receive distributions from net investment income in additional
Investor Shares of your Fund while receiving capital gain
distributions in cash; or

o Receive all distributions in cash.

You can change your distribution option by notifying BFDS in writing. If you do
not select an option when you open your account, a Fund will reinvest all
distributions in Investor Shares of that Fund. You will receive a statement
confirming reinvestment of distributions in additional Fund shares promptly
following the period in which the reinvestment occurs.

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

Excessive trading can hurt Fund performance, operations, and shareholders. The
Board of Trustees of each of the Funds has adopted policies and procedures with
respect to frequent purchases and redemptions of Fund shares by Fund
shareholders. The Funds discourage, and will not seek to accommodate, frequent
purchases and redemption of the Funds' shares to the extent Schroders believes
that such trading is harmful to the Funds' shareholders, although the Funds will
not necessarily prevent all frequent trading in their shares. Each Fund reserves
the right, in its discretion, to reject any purchase, in whole or in part
(including, without limitation, purchases by persons whose trading activity
Schroders believes could be harmful to a Fund). The Trust or Schroders may also
limit the amount or number of exchanges or reject any exchange if the Trust or
Schroders believes that the investor in question is engaged in "market timing
activities" or similar activities that may be harmful to the Fund or its
shareholders, although the Trust and Schroders have not established any maximum
amount or number of such exchanges that may occur in any period. The ability of
Schroders to monitor trades that are placed through omnibus or other nominee
accounts is limited in those instances in which the broker, retirement plan
administrator, or fee-based program sponsor does not provide complete
information to Schroders regarding underlying beneficial owners of Fund shares.
The Trust or Schroders may take any steps they consider appropriate in respect
of frequent trading in omnibus accounts, including potentially closing the
omnibus account. Please see the Statement of Additional Information for
additional information on frequent purchases and redemptions of Fund shares.
There can be no assurance that a Fund or Schroders will identify all harmful
purchase or redemption activity, or market timing or similar activities,
affecting a Fund, or that a Fund or Schroders will be successful in limiting or
eliminating such activities.

PAYMENT OF FEES

Each Fund may pay Schroders or its affiliates, banks, broker-dealers, financial
advisors, or other financial institutions fees for sub-administration,
sub-transfer agency, and other shareholder services associated with shareholders
whose shares are held of record in omnibus or other group accounts. In addition,
each Fund's service providers, including Schroders, or any of their affiliates,
may, from time to time, make these types of payment or payments for other
shareholder services or distribution, out of their own resources and without
additional cost to the Fund or its shareholders.

-19-

TAXES

TAXES ON DIVIDENDS AND DISTRIBUTIONS. For federal income tax purposes,
distributions of investment income (other than exempt-interest dividends, as
described below) are taxed as ordinary income. Taxes on distributions of capital
gains are determined by how long the Fund owned the investments that generated
the gains, rather than how long you have owned your shares. Distributions of net
capital gains from the sale of investments that a Fund has held for more than
one year and that are properly designated by the Fund as capital gain dividends
will be taxable as long-term capital gains. Distributions of gains from the sale
of investments that a Fund owned for one year or less will be taxable as
ordinary income. Generally, gains realized by a Fund on the sale or exchange of
investments, the income from which is tax exempt, will be taxable to
shareholders. For taxable years beginning on or before December 31, 2008,
distributions of investment income designated by a Fund as derived from
"qualified dividend income" will be taxed in the hands of individuals at rates
applicable to long-term capital gains provided holding period and other
requirements are met at both the shareholder and Fund level. Neither Fund
expects a significant portion of Fund distributions to be derived from qualified
dividend income.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares.

In general, dividends (other than capital gain dividends) paid to a shareholder
that is not a "U.S. person" within the meaning of the Code (a "foreign person"),
are subject to withholding of U.S. federal income tax at a rate of 30% (or lower
applicable treaty rate). However, under the American Jobs Creation Act of 2004
(the "2004 Act"), effective for taxable years of the Fund beginning after
December 31, 2004 and before January 1, 2008, the Fund generally will not be
required to withhold any amounts with respect to distributions of (i) U.S.
source interest income that would not be subject to U.S. federal income tax if
earned directly by an individual foreign person, and (ii) net short-term capital
gains in excess of net long-term capital losses, in each case to the extent such
distributions are properly designated by the Fund.

Fund distributions designated as "exempt-interest dividends" are not generally
subject to federal income tax. However, if you receive social security or
railroad retirement benefits, you should consult your tax advisor to determine
what effect, if any, an investment in the Funds may have on the federal taxation
of your benefits. In addition, an investment in a Fund that pays exempt-interest
dividends may result in liability for federal AMT, both for individual and
corporate shareholders. For example, while the interest from qualified private
activity bonds is generally not subject to federal income tax, many types of
private activity bond interest must be included in taxable income for federal
AMT purposes. The exemption from federal income tax for exempt-interest
dividends does not necessarily result in exemption for such dividends under the
income or other tax laws of any state or local authority. Although under normal
circumstances, each Fund invests at least 80% of its net assets in investments
the income from which is exempt from federal income tax, the Funds may invest a
portion of their assets in securities that generate income that is not exempt
from federal income tax. Also, the Fund may invest as much as a 100% of its net
assets in investments the income from which may result in liability for federal
AMT both for individual and corporate shareholders.

Long-term capital gain rates applicable to individuals have been temporarily
reduced - in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets - for taxable years beginning on or before December 31,
2008.

TAXES WHEN YOU SELL, REDEEM OR EXCHANGE YOUR SHARES. Any gain resulting from a
redemption, sale or exchange (including an exchange for shares of another fund)
of your shares in a Fund will also generally be subject to federal income tax at
either short-term or long-term capital gain rates depending on how long you have
owned your shares.

INVESTMENTS IN DEBT OBLIGATIONS. A Fund's investment in certain debt obligations
may cause the Fund to recognize taxable income in excess of the cash generated
by such obligations. Thus, a Fund could be required at times to liquidate other
investments in order to satisfy its distribution requirements.

-20-

CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This is a
summary of certain U.S. federal income tax consequences of investing in a Fund.
You should consult your tax advisor for more information on your own tax
situation, including possible other federal, state, local and foreign tax
consequences of investing in a Fund.

DISCLOSURES OF FUND PORTFOLIO INFORMATION

Please see the Statement of Additional Information for a description of the
Funds' policies and procedures regarding the persons to whom the Funds or
Schroders may disclose the Funds' portfolio securities positions, and under
which circumstances.

FINANCIAL HIGHLIGHTS

The financial highlights below are intended to help you understand the financial
performance of each of the Funds since their inception. Certain information
reflects financial results for a single Fund share. The total returns represent
the total return for an investment in Investor Shares of a Fund, assuming
reinvestment of all dividends and distributions.

For all periods presented, the financial highlights have been audited by
PricewaterhouseCoopers LLP, independent registered public accountant to the
Funds. The audited financial statements for the Funds and the related
independent registered public accountant's report are contained in the Trust's
combined Annual Report and are incorporated by reference into the Trust's
Statement of Additional Information. Copies of the Annual Report may be obtained
without charge by writing the Trust at P.O. Box 8507, Boston, Massachusetts
02266 (regular mail) or at 66 Brooks Drive, Braintree, Massachusetts 02184
(overnight or express mail), or by calling (800) 464-3108.

For the years or period ended October 31 Selected Per Share Data and Ratios for
a Share Outstanding Throughout Each Period

Net Asset Net Net Realized Total from Dividends Distributions Distributions Total
Value, Investment and Unrealized Investment from Net from Net from Return Distributions
Beginning Income Gains (Losses) Operations Investment Realized Gain of Capital
of Period (Loss) on Investments Income on Investments
and Foreign in Foreign
Currency Currency
Transactions Transactions

Municipal
Bond Fund
Investor $10.00 $0.24 $0.11 $0.35 $(0.23) $---- $---- $(0.23)
Shares
2004*
Short-Term
Municipal
Bond Fund
Investor $10.00 $0.15 $(0.03) $0.12 $(0.15) $---- $---- $(0.15)
Shares
2004*

Net Asset Total Net Assets, Ratio of Expenses Ratio of Expenses Ratio of Net Portfolio
Value, End Return (a) End of to Average Net to Average Net Investment Income Turnover
of Period Period (000) Assets (Including Assets (Excluding (Loss) to Average Rate
Waivers, Waivers, Net Assets
Reimbursements and Reimbursements and (Including
Offsets) Offsets) Waivers,
Reimbursements and
Offsets)

Municipal
Bond Fund
Investor $10.12 3.53% $45,781 0.55% 1.41% 2.82% 46%
Shares
2004*
Short-Term
Municipal
Bond Fund
Investor $9.97 1.26% $74,031 0.55% 1.30% 1.95% 17%
Shares
2004*

-21-

* Commenced operations on December 31, 2003. All ratios for the period have been
annualized, except for the Portfolio Turnover Rate.

(a) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. Total return calculations for a
period of less than one year are not annualized.

USA PATRIOT ACT

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. What
this means to you: When you open an account directly with a Fund, you will be
asked your name, address, date of birth, and other information that will allow
you to be identified. You may also be asked for other identifying documentation.
If the Trust is unable to verify the information shortly after your account is
opened, your account may be closed and your shares redeemed at their net asset
values at the time of the redemption.

-22-

INVESTMENT ADVISER
Schroder Investment Management North America Inc.
875 Third Avenue
New York, New York 10022

ADMINISTRATOR
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, Pennsylvania 19456

CUSTODIAN
J.P. Morgan Chase Bank
270 Park Avenue
New York, New York 10017

DISTRIBUTOR
Schroder Fund Advisors Inc.
875 Third Avenue
New York, New York 10022

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171

COUNSEL
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Suite 1700
2001 Market Street
Philadelphia, Pennsylvania 19103

SCHRODER SERIES TRUST
Schroder Municipal Bond Fund
Schroder Short-Term Municipal Bond Fund

Each of Schroder Municipal Bond Fund and Schroder Short-Term Municipal Bond Fund
has a statement of additional information (SAI) and annual and semi-annual
reports to shareholders which include additional information about the Funds.
The SAIs and the financial statements included in the Trust's most recent annual
report to shareholders are incorporated by reference into this Prospectus, which
means they are part of this Prospectus for legal purposes. You may get free
copies of these materials, request other information about a Fund, or make
shareholder inquiries by calling (800) 464-3108. From outside the United States,
please call collect to (617) 483-5000 and ask to speak with a representative of
the Schroder Mutual Funds.

You may review and copy information about a Fund, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about a Fund on the Commission's Internet site at www.sec.gov. You
may get copies of this information, with payment of a duplication fee, by
electronic request to the following e-mail address: publicinfo@sec.gov or by
writing the Public Reference Section of the Commission, Washington, D.C.
20549-0102. You may need to refer to Schroder Series Trust's file number under
the Investment Company Act, which is 811-7840.

SCHRODER SERIES TRUST
875 Third Avenue
New York, New York 10022
(800) 464-3108

File No. 811-7840

[SCHRODER LOGO OMITTED]
--------------------------------------------------------------------------------

PROSPECTUS
MARCH 1, 2005

SCHRODER MUNICIPAL BOND FUND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Advisor Shares

This Prospectus describes two mutual funds offered by Schroder Series Trust (the
"Trust").

Each of the Funds may invest a portion of its assets in securities paying
interest that is not exempt from federal income tax.

SCHRODER SERIES TRUST

TABLE OF CONTENTS

PAGE

SUMMARY INFORMATION........................................................ 3

Schroder Municipal Bond Fund........................................... 3

Schroder Short-Term Municipal Bond Fund................................ 5

FEES AND EXPENSES.......................................................... 7

PRINCIPAL RISKS OF INVESTING IN THE FUNDS.................................. 9

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES......................... 12

MANAGEMENT OF THE FUNDS.................................................... 13

HOW THE FUNDS' SHARES ARE PRICED........................................... 14

HOW TO BUY SHARES.......................................................... 15

HOW TO SELL SHARES......................................................... 17

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES;

DISTRIBUTION PLANS......................................................... 19

EXCHANGES.................................................................. 19

DIVIDENDS AND DISTRIBUTIONS................................................ 19

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES.......................... 20

PAYMENT OF FEES............................................................ 20

TAXES...................................................................... 20

DISCLOSURES OF FUND PORTFOLIO INFORMATION.................................. 21

FINANCIAL HIGHLIGHTS....................................................... 22

USA PATRIOT ACT............................................................ 22

-2-

SUMMARY INFORMATION

This summary provides a brief description of the Funds' investment objectives,
principal investment strategies, and principal risks.

The summary for each Fund includes a bar chart that shows the investment return
of the Fund's Advisor Shares for each full calendar year since the Fund
commenced operations. The table following each bar chart shows how a Fund's
average annual return for the last year (the life of the Fund) compares to a
broad-based securities market index. The bar chart and table provide some
indication of the risks of investing in a Fund by comparing the Fund's
performance to a broad measure of market performance.

SCHRODER MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of current income exempt from
federal income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that

o pay interest that is exempt from federal income tax (but which
may be subject to federal alternative minimum tax);

o are investment-grade in quality; and

o have intermediate to long-term effective maturities (three years
or longer) (a bond's effective maturity is generally shorter than
its stated maturity due to several factors, including, for
example, prepayment patterns, call dates, and put features).

-3-

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a prerefunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and
market trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The municipal bond market
is volatile and can be significantly affected by adverse tax,
legislative, or political changes and the financial condition of
the issuers of municipal bonds.

o INTEREST RATE RISK. Interest rate increases can cause the price of
a debt security to decrease. In addition, if a security is
prepaid in a period of falling interest rates, the Fund may have
to reinvest the proceeds in lower-yielding investments. Interest
rate risk is generally greater in the case of securities with
longer maturities and in the case of portfolios of securities
with longer average maturities.

o CREDIT RISK. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal on
the security will affect the value of the security.

o INFLATION/DEFLATION RISK. Inflation risk is the risk that the value
of the Fund's investments may decline as inflation decreases the
value of money. Deflation risk is the risk that prices throughout
the economy may decline over time, which may have an adverse
effect on the creditworthiness of issuers in whose securities the
Fund invests.

o CONCENTRATION RISK. Investing in bonds issued by a state or by
state agencies or political subdivisions in the same state may
make a Fund more vulnerable to that state's economy and to issues
affecting its municipal bond issuers. Geographic or sector
concentration may cause the value of the Fund's shares to change
more than the value of shares of funds that invest in a greater
variety of investments. The Fund may also invest a substantial
portion of its assets in a particular issue, and to that extent
the Fund's investment performance and net asset value will be
adversely affected by a decrease in the value of that issue more
than if such Fund invested in a greater number of securities.

o MANAGEMENT RISK. Because the Fund is actively managed, its
investment return depends on the ability of its adviser to manage
its portfolio successfully. The adviser and the Fund's portfolio
managers will apply investment techniques and risk analyses in
making investment decisions for the Fund, but there can be no
guarantee that these will produce the desired results.

-4-

Performance Information.

[GRAPHIC OMITTED]

3.44%

2004

During the periods shown above, the highest quarterly return was 3.06% for the
quarter ended September 30, 2004, and the lowest was -1.86% for the quarter
ended June 30, 2004.

--------------------------------------------------------- ----------------------
AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2004) (Life of the Fund)
--------------------------------------------------------- ----------------------
Schroder Municipal Bond Fund
--------------------------------------------------------- ----------------------
Return Before Taxes 3.44%
--------------------------------------------------------- ----------------------
Return After Taxes on Distributions (1) 3.39%
--------------------------------------------------------- ----------------------
Return After Taxes on Distributions and Sale of 3.10%
Fund Shares (1)
--------------------------------------------------------- ----------------------
Lehman Brothers Municipal Bond 5-Year Index (2) 2.71%
(reflects no deduction for fees, expenses or
taxes)
--------------------------------------------------------- ----------------------

(2) The Lehman Brothers Municipal Bond 5-Year Index is a rules-based,
market-value-weighted unmanaged index of debt obligations issued by
municipalities with an approximate maturity of five years.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of income exempt from
federal income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that

o pay interest that is exempt from federal income tax (but which may
be subject to federal alternative minimum tax);

o are investment-grade in quality; and

o have effective maturities of no more than three years (a bond's
effective maturity is generally shorter than its stated maturity
due to several factors, including, for example, prepayment
patterns, call dates, and put features).

-5-

The Fund may invest more than 25% of its assets in one or more sectors of the
municipal bond market - that is, in a group of issuers that finance similar
projects - including education, health care, housing, transportation, and
utilities sectors or in obligations of issuers in a particular state. In
managing the Fund, the Fund's adviser generally relies on detailed proprietary
research. The Fund's adviser focuses on the securities and sectors it believes
are undervalued relative to the market, rather than relying on interest rate
forecasts.

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a prerefunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and
market trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The municipal bond market
is volatile and can be significantly affected by adverse tax,
legislative, or political changes and the financial condition of
the issuers of municipal bonds.

o CREDIT RISK. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal
on the security will affect the value of the security.

-6-

the economy may decline over time, which may have an adverse
effect on the creditworthiness of issuers in whose securities the
Fund invests.

o CONCENTRATION RISK. Investing in bonds issued by a state or by state
agencies or political subdivisions in the same state may make a
Fund more vulnerable to that state's economy and to issues
affecting its municipal bond issuers. Geographic or sector
concentration may cause the value of the Fund's shares to change
more than the value of shares of funds that invest in a greater
variety of investments. The Fund may also invest a substantial
portion of its assets in a particular issue, and to that extent
the Fund's investment performance and net asset value will be
adversely affected by a decrease in the value of that issue more
than if such Fund invested in a greater number of securities.

o MANAGEMENT RISK. Because the Fund is actively managed, its
investment return depends on the ability of its adviser to manage
its portfolio successfully. The adviser and the Fund's portfolio
managers will apply investment techniques and risk analyses in
making investment decisions for the Fund, but there can be no
guarantee that these will produce the desired results.

Performance Information.

[GRAPHIC OMITTED]

1.53%

2004

During the periods shown above, the highest quarterly return was 1.30% for the
quarter ended September 30, 2004, and the lowest was -0.90% for the quarter
ended June 30, 2004.

------------------------------------------------------ -------------------------
AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2004) (Life of the Fund)
------------------------------------------------------ -------------------------
Schroder Short-Term Municipal Bond Fund
------------------------------------------------------ -------------------------
Return Before Taxes 1.53%
------------------------------------------------------ -------------------------
Return After Taxes on Distributions (1) 1.48%
------------------------------------------------------ -------------------------
Return After Taxes on Distributions and Sale of 1.55%
Fund Shares (1)
------------------------------------------------------ -------------------------
Lehman Brothers Municipal Bond 1-Year Index (2) 1.04%
(reflects no deduction for fees, expenses or
taxes)
------------------------------------------------------ -------------------------

(2) The Lehman Brothers Municipal Bond 1-Year Index is an unmanaged
rules-based, market-value-weighted index of debt obligations issued by
municipalities with short-term maturities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
ADVISOR SHARES OF THE FUNDS.

-7-

SHAREHOLDER FEES (paid directly from your investment):

Maximum Sales Load Imposed on Purchases..............................None
Maximum Deferred Sales Load..........................................None
Maximum Sales Load Imposed on Reinvested Dividends...................None
Redemption Fee.......................................................None
Exchange Fee.........................................................None

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):

----------------------------- ------------------ -------------------
SCHRODER SCHRODER
MUNICIPAL BOND SHORT-TERM
FUND MUNICIPAL BOND
FUND
----------------------------- ------------------ -------------------
Management Fees 0.40% 0.40%
----------------------------- ------------------ -------------------
Distribution (12b-1) Fees 0.25% 0.25%
----------------------------- ------------------ -------------------
Other Expenses 0.99% 0.79%
----------------------------- ------------------ -------------------
Total Annual Fund Operating 1.64% 1.44%
Expenses
----------------------------- ------------------ -------------------
Less: Fee Waiver
and/or Expense (0.84)% (0.64)%
Limitation(1)
----------------------------- ------------------ -------------------
Net Expenses(1) 0.80% 0.80%
----------------------------- ------------------ -------------------

(1) The Net Expenses shown for each Fund reflect the effect of
contractually imposed fee waivers and/or expense limitations, on the
Total Annual Fund Operating Expenses of the Fund. In order to limit the
expenses of each Fund's Advisor Shares, the Fund's adviser is
contractually obligated to reduce its compensation and, if necessary, to
pay certain other Fund expenses until February 28, 2006 to the extent
that the Total Annual Fund Operating Expenses of the Fund allocable to
its Advisor Shares exceeds the annual rate of 0.80% of the average daily
net assets attributable to a Fund's Advisor Shares.

EXAMPLE

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Advisor Shares of a Fund for the
time periods indicated and then redeem all of your Advisor Shares at the end of
those periods. The Example also assumes that your investment earns a 5% return
each year and that the Fund's operating expenses for each year are the same as
the Fund's Total Annual Fund Operating Expenses shown above (except that, in the
first year, the operating expenses are the same as the Fund's Net Expenses shown
above). Your actual costs may be higher or lower. Based on these assumptions,
your costs would be:

---------------------------------------- -------- --------- --------- ----------
1 Year 3 Years 5 Years 10 Years
---------------------------------------- -------- --------- --------- ----------
Schroder Municipal Bond Fund $82 $435 $813 $1,873
---------------------------------------- -------- --------- --------- ----------
Schroder Short-Term Municipal $82 $393 $726 $1,669
Bond Fund
---------------------------------------- -------- --------- --------- ----------

Because of Rule 12b-1 fees paid by the Funds, long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales load permitted
under applicable broker-dealer sales rules.

-8-

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

-9-

Each of the Funds invests principally in securities of "investment grade," at
the time of purchase which means either that a nationally recognized statistical
rating organization (for example, Moody's Investor Service, Inc., Standard &
Poor's, or Fitch Investors Service, Inc.), has rated the securities Baa3 or BBB-
(or the equivalent) or better, or the Funds' investment adviser has determined
the securities to be of comparable quality. If a security has been rated by more
than one nationally recognized statistical rating organization, the Fund's
adviser will consider the highest rating for the purposes of determining whether
the security is "investment grade." A Fund will not necessarily dispose of a
security held by it if its rating falls below investment grade, although the
Funds adviser will consider whether the security continues to be an appropriate
investment for the Fund. Each Fund considers whether a security is "investment
grade" only at the time of purchase.

-10-

-11-

o MANAGEMENT RISK. Because each Fund is actively managed, its investment return
depends on the ability of its adviser to manage its portfolio successfully. The
adviser and the portfolio managers will apply investment techniques and risk
analyses in making investment decisions for the Funds, but there can be no
guarantee that these will produce the desired results.

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

-12-

adversely affect a Fund's performance. During periods when a Fund experiences
high portfolio turnover rates, these effects are likely to be more pronounced.
The Funds' adviser currently expects that the portfolio turnover rate for the
current fiscal year will not exceed 100% for each of the Funds. Consult your tax
advisor regarding the tax effect of a Fund's portfolio turnover rate on your
investment.

MANAGEMENT OF THE FUNDS

o INVESTMENT ADVISORY FEES. Each Fund pays an investment advisory fee to
Schroders at the annual rate of 0.40% of the Fund's average daily net assets.

o EXPENSE LIMITATIONS AND WAIVERS. In order to limit the expenses of the
Funds' Advisor Shares, Schroders is contractually obligated to reduce its
compensation and, if necessary, to pay certain other Fund expenses until
February 28, 2006 to the extent that the Total Annual Fund Operating Expenses of
a Fund allocable to its Advisor Shares exceeds the annual rate of 0.80% of the
average daily net assets attributable to such Fund's Advisor Shares. Only the
Board of Trustees of the Trust may terminate this contractual obligation prior
to February 28, 2006.

o PORTFOLIO MANAGEMENT. The following portfolio managers at Schroders have
primary responsibility for making investment decisions for the Funds since the
years shown below.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE

David Baldt, CFA Inception Lead portfolio manager for each of
(December 2003) the Funds. Employed as an
investment Fund professional at

-13-

Schroders since fall 2003. Mr.
Baldt is an Executive Vice President
of Schroders. Previously, he was a
Managing Director of Deutsche Asset
Management (formerly Morgan
Grenfell) since 1989.

Daniel Scholl Inception Employed as an investment Fund
(December 2003) professional at Schroders since fall
2003. Mr. Scholl is a Senior Vice
President of Schroders. Previously,
he was a Director and Portfolio
Manager of Deutsche Asset Management
(formerly Morgan Grenfell) since
1998.

Susan Beck Inception Employed as an investment Fund
(December 2003) professional at Schroders since fall
2003. Ms. Beck is a First Vice
President of Schroders. Previously,
she was a Vice President and
Portfolio Manager of Deutsche Asset
Management (formerly Morgan
Grenfell) since 1989.

Ted Manges Inception Employed as an investment Fund
(December 2003) professional at Schroders since fall
2003. Mr. Manges is a First Vice
President of Schroders. Previously
he was a Vice President of Deutsche
Asset Management (1999-2003), and
Manager of Trading and Sales,
Commerce Capital Markets (1995-1999).

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Advisor Shares by dividing the
total value of its assets attributable to its Advisor Shares, less its
liabilities attributable to those shares, by the number of Advisor Shares
outstanding. Each Fund values its Advisor Shares as of the close of trading on
the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each day the
Exchange is open. The Trust expects that days, other than weekend days, when the
Exchange will not be open are New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Each Fund values its portfolio securities
for which market quotations are readily available at market value. Investments
and assets for which market values are not readily available are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, generally by reference to other securities or indexes. For example,
most of the Funds' investments are currently valued using one or more pricing
services that recommend fair values based generally on prices of comparable
securities (or, when such prices are not available, based on other factors that
may be indicative of the securities' values). Short-term investments that will
mature within 60 days are valued by Schroders using amortized cost, a form of
fair valuation, pursuant to procedures

-14-

adopted by the Board of Trustees. The net asset value of each Fund's Advisor
Shares may differ from that of its Investor Shares due to differences in the
expenses of Advisor Shares and Investor Shares.

HOW TO BUY SHARES

You may purchase Advisor Shares of the Fund directly from the Trust (through
Schroder Fund Advisors Inc., the distributor of the Trust's shares), or through
a service organization such as a bank, trust company, broker-dealer, or other
financial organization (a "Service Organization") having an arrangement with
Schroder Fund Advisors Inc. If you do not have a Service Organization, Schroder
Fund Advisors Inc. can provide you with a list of available firms. Your Service
Organization is responsible for forwarding all of the necessary documentation to
the Trust, and may charge you separately for its services.

The purchase, redemption and exchange policies and fees charged by such Service
Organizations may be different than those of the Funds. For instance, banks,
brokers, retirement plans and financial advisers may charge transaction fees in
addition to any fees charged by the Funds, and may set different investment
minimums or limitations on buying, exchanging, or redeeming Advisor Shares.
Please consult a representative of your Service Organization for further
information.

If the Advisor Shares you purchase will be held in your own name (rather than
the name of your Service Organization), your payment for the shares must be
accompanied by a completed Account Application and payment by check or wire as
described below. Account Applications for Advisor Shares may be obtained from
the Fund's transfer agent, Boston Financial Data Services, Inc. ("BFDS"), at the
address provided below under "Purchases by Check," from your Service
Organization, or by calling the Schroder Mutual Funds at (800) 464-3108 (from
outside the United States, please call collect to (617) 483-5000 and ask to
speak with a Schroder Mutual Funds representative). Acceptance of your order may
be delayed pending receipt of additional documentation, such as copies of
corporate resolutions and instruments of authority, from corporations,
administrators, executors, personal representatives, directors, or custodians.

Each Fund sells Advisor Shares at their net asset value next determined after
the applicable Fund or its transfer agent, BFDS, receives your request in good
order (meaning that the request meets the requirements set out below and in the
Account Application, and otherwise meets the requirements implemented from time
to time by the Funds' transfer agent or the Fund). In order for you to receive
the Fund's next determined net asset value, the Fund or BFDS must receive your
order before the close of trading on the New York Stock Exchange (normally 4:00
p.m. Eastern Time). The Trust reserves the right to reject any order to purchase
Advisor Shares of the Fund.

Certain brokers or financial institutions may accept purchase and redemption
orders for Advisor Shares on behalf of the Fund. Such brokers or financial
institutions may designate other intermediaries to accept purchase and
redemption orders on behalf of the Fund. For purposes of pricing, the Fund may
be deemed to have received a purchase or redemption order when an authorized
broker or financial institution or, if applicable, a broker or financial
institution's authorized designee, receives the order. Agreements between such
brokers or financial institutions and Schroder Fund Advisors Inc., the Trust's
distributor, provide that these orders would be priced at the Fund's net asset
value next determined after they are received by the broker or financial
institution or authorized designee.

The minimum investments for initial and additional purchases of Advisor Shares
of the Fund are as follows:

INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
---------- -----------
Regular Accounts $10,000 $1,000
Traditional and Roth IRAs
Investments in respect of
calendar year 2004 $3,000 $250
Investments in respect of
calendar year 2005 $4,000 $250

-15-

The Funds do not issue share certificates.

The Trust may suspend the offering of Advisor Shares of the Fund for any period
of time. The Trust may change any investment minimum from time to time.

Purchases by check. You may purchase Advisor Shares of the Fund by mailing a
check (in U.S. dollars) payable to the Fund. Schroder Mutual Funds will not
accept third-party checks. You should direct your check and your completed
Account Application as follows:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184

For initial purchases, a completed Account Application must accompany your
check.

Once you have an account number, you may purchase Advisor Shares through your
Service Organization or directly from the Funds by calling BFDS at (800)
464-3108 to give notice that you will send funds by wire, and obtain a wire
reference number. (From outside the United States, please call collect to (617)
483-5000 and ask to speak with a Schroder Mutual Funds representative.) Please
be sure to obtain a wire reference number. Instruct your bank to wire funds with
the assigned reference number as follows:

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
ABA No.: 011000028
Attn: Schroder Mutual Funds
DDA No.: 9904-650-0
FBO: Account Registration
A/C: Mutual Fund Account Number
Name of Fund

BFDS will not process your purchase until the wired funds have been received.

Automatic purchases. If you purchase Advisor Shares directly from the Trust and
the shares are held in your own name, you can make regular investments of $100
or more per month or quarter in Advisor Shares of the Fund through automatic
deductions from your bank account. Please complete the appropriate section of
the Account Application if you would like to utilize this option. For more
information,

-16-

please call (800) 464-3108. If you purchase Advisor Shares through a Service
Organization, your firm may also provide automatic purchase options. Please
contact your Service Organization for details.

Purchases in-kind. Investors may purchase Advisor Shares of the Fund for cash or
in exchange for securities, subject to the determination by Schroders in its
discretion that the securities are acceptable. (For purposes of determining
whether securities will be acceptable, Schroders will consider, among other
things, whether they are liquid securities of a type consistent with the
investment objectives and policies of the Fund and have a readily ascertainable
value.) If the Fund receives securities from an investor in exchange for Advisor
Shares of the Fund, the Fund will under some circumstances have the same tax
basis in the securities as the investor had prior to the exchange (and the
Fund's gain for tax purposes would be calculated with regard to the investor's
tax basis), and in such cases the Fund's holding period in those securities
would include the investor's holding period. Any gain on the sale of securities
received in exchange for Advisor Shares of the Fund would be subject to
distribution as capital gain to all of the Fund's shareholders. (In some
circumstances, receipt of securities from an investor in exchange for Advisor
Shares of the Fund may be a taxable transaction to the investor, in which case
the Fund's tax basis in the securities would reflect the fair market value of
the securities on the date of the exchange, and its holding period in the
securities would begin on that date.) Each Fund values securities accepted by
Schroders in the same manner as are the Fund's portfolio securities as of the
time of the next determination of the Fund's net asset value. Although each Fund
seeks to determine the fair value of securities contributed to the Fund, any
valuation that does not reflect fair value may dilute the interests of the
purchasing shareholder or the other shareholders of the Fund. All rights
reflected in the market price of accepted securities at the time of valuation
become the property of the Fund and must be delivered to the Fund upon receipt
by the investor. Investors may realize a taxable gain or loss upon the exchange.
Investors interested in purchases through exchange should telephone Schroders at
(800) 464-3108, their Schroders client representative, or other financial
intermediary.

Certain payments by Schroders or its affiliates. Schroder Fund Advisors Inc.,
Schroders, or their affiliates may, at their own expense and out of their own
assets, provide compensation to financial intermediaries in connection with
sales of Fund shares or shareholder servicing. In some instances, they may make
this compensation available only to certain intermediaries who have sold or are
expected to sell significant amounts of shares of the Fund. If you purchase or
sell shares through an intermediary, the intermediary may charge a separate fee
for its services. Consult your intermediary for information.

HOW TO SELL SHARES

When You May Redeem. You may sell your Advisor Shares back to the Fund on any
day the New York Stock Exchange is open, either through your Service
Organization or directly to the Fund. If your shares are held in the name of a
Service Organization, you may only sell the shares through that Service
Organization. The Service Organization may charge you a fee for its services. If
you choose to sell your shares directly to the Fund, you may do so by sending a
letter of instruction or stock power form to Schroder Mutual Funds, or by
calling BFDS at (800) 464-3108. The price you will receive is the net asset
value next determined after receipt of your redemption request in good order by
Schroder Mutual Funds or BFDS. A redemption request is in good order if it
includes the exact name in which the shares are registered, the investor's
account number, and the number of shares or the dollar amount of shares to be
redeemed, and, for written requests, if it is signed in accordance with the
account registration. A bank, broker-dealer, or certain other financial
institutions must guarantee any signature in the form of the Stamp 2000
Medallion Guarantee. You may redeem your shares by telephone only if you elected
the telephone redemption privilege option on your Account Application or
otherwise in writing. Telephone redemption proceeds will be sent only to you at
an address on record with the Funds for at least 30 days. Unless otherwise
agreed, you may only exercise the telephone redemption privilege to redeem
shares worth not more than $50,000. The Trust may require additional
documentation from shareholders that are corporations,

-17-

partnerships, agents, fiduciaries, surviving joint owners, those acting through
powers of attorney, or similar delegation.

If you redeem shares through your Service Organization, your Service
Organization is responsible for ensuring that the Transfer Agent receives your
redemption request in proper form and at the appropriate time. If your Service
Organization receives Federal Reserve wires, you may instruct that your
redemption proceeds be forwarded by wire to your account with your Service
Organization; you may also instruct that your redemption proceeds be forwarded
to you by a wire transfer. Please indicate your Service Organization's or your
own complete wiring instructions. Your Service Organization may charge you
separately for this service.

The Trust will pay you for your redemptions as promptly as possible and in any
event within seven days after the request for redemption is received in good
order. The Trust generally sends payment for shares on the business day after a
request is received. In case of emergencies, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law. If you paid
for your Advisor Shares by check, the Trust will not send you your redemption
proceeds until the check you used to pay for the shares has cleared, which may
take up to 15 calendar days from the purchase date.

Involuntary Redemptions. If, because of your redemptions, your account balance
for a Fund falls below a minimum amount set by the Trustees (presently $2,000),
the Trust may choose to redeem your Advisor Shares in that Fund and pay you for
them. You will receive at least 30 days written notice before the Trust redeems
your Advisor Shares, and you may purchase additional Advisor Shares at any time
to avoid a redemption. The Trust may also redeem Advisor Shares if you own
shares of a Fund above a maximum amount set by the Trustees. There is currently
no maximum, but the Trustees may establish one at any time, which could apply to
both present and future shareholders.

Redemptions in-kind. The Trust has agreed to redeem Advisor Shares of each Fund
solely in cash up to the lesser of $250,000 or 1% of the Fund's net assets
attributable to Advisor Shares during any 90-day period for any one shareholder.
In consideration of the best interests of the remaining shareholders of a Fund,
the Trust may pay any redemption proceeds exceeding this amount in whole or in
part by a distribution in-kind of securities held by a Fund in lieu of cash. The
Trust does not expect to redeem Advisor Shares in-kind under normal
circumstances. If the Trust redeems your Advisor Shares in-kind, you should
expect to incur brokerage expenses and other transaction costs upon the
disposition of the securities you receive from the Fund. In addition, the price
of those securities may change between the time when you receive the securities
and the time when you are able to dispose of them.

-18-

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES; DISTRIBUTION PLANS

The Trust sells Advisor Shares of the Fund at their net asset value without any
sales charges or loads, so that the full amount of your purchase payment is
invested in the Fund. You also receive the full value of your Advisor Shares
when you sell them back to the Fund, without any deferred sales charge.

Distribution plans. The Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, that allows the Fund
to pay distribution and other fees with respect to its Advisor Shares. Under the
Plan, the Fund may make payments at an annual rate of up to 0.25% of the average
daily net assets attributable to its Advisor Shares to compensate the
distributor for distribution services and certain shareholder services with
respect to the Fund's Advisor Shares.

Because the fees are paid out of the Fund's assets on a ongoing basis, over time
these fees will increase the cost of an investment in Advisor Shares of the Fund
and may cost you more than paying other types of sales charges.

In addition, the Fund may pay Schroders or its affiliates, banks,
broker-dealers, financial advisors, or other financial institutions fees for
sub-administration, sub-transfer agency, and other shareholder services
associated with shareholders whose shares are held of record in omnibus or other
group accounts. In addition, the Fund's service providers, including Schroders,
or any of their affiliates, may, from time to time, make these types of payment
or payments for other shareholder services or distribution, out of their own
resources and without additional cost to the Fund or its shareholders.

EXCHANGES

You can exchange your Advisor Shares of a Fund for Advisor Shares of most other
funds in the Schroder family of funds at any time at their respective net asset
values. The Trust would treat the exchange as a sale of your Advisor Shares, and
any gain on the exchange will generally be subject to tax. For a listing of the
Schroder funds available for exchange and to exchange Advisor Shares, please
contact your Service Organization or call the Trust directly at (800) 464-3108.
(From outside the United States, please call collect to (617) 483-5000 and ask
to speak with a representative of the Schroder Mutual Funds.) In order to
exchange shares by telephone, you must complete the appropriate section of the
Account Application. The Trust and Schroders reserve the right to change or
suspend the exchange privilege at any time. Schroders would notify shareholders
of any such change or suspension.

DIVIDENDS AND DISTRIBUTIONS

Shares begin to earn dividends on the first business day following the day of
purchase. Shares earn dividends through the date of redemption.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

o Reinvest all distributions in additional Advisor Shares of your
Fund;

o Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Advisor
Shares of your Fund;

o Receive distributions from net investment income in additional
Advisor Shares of your Fund while receiving capital gain
distributions in cash; or

-19-

o Receive all distributions in cash.

You can change your distribution option by notifying BFDS in writing. If you do
not select an option when you open your account, a Fund will reinvest all
distributions in Advisor Shares of that Fund. You will receive a statement
confirming reinvestment of distributions in additional Fund shares promptly
following the period in which the reinvestment occurs.

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

PAYMENT OF FEES

TAXES

-20-

DISCLOSURES OF FUND PORTFOLIO INFORMATION

-21-

FINANCIAL HIGHLIGHTS

The financial highlights below are intended to help you understand the financial
performance of each of the Funds since their inception. Certain information
reflects financial results for a single Fund share. The total returns represent
the total return for an investment in Advisor Shares of a Fund, assuming
reinvestment of all dividends and distributions.

For the years or period ended October 31
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period

Municipal
Bond Fund
Advisor $10.00 $0.21 $0.11 $0.32 $(0.21) $---- $---- $(0.21)
Shares
2004*
Short-Term
Municipal
Bond Fund
Advisor $10.00 $0.13 $(0.03) $0.10 $(0.13) $---- $---- $(0.13)
Shares
2004*

Net Asset Total Net Assets, Ratio of Expenses Ratio of Expenses Ratio of Net Portfolio
Value, End Return (a) End of to Average Net to Average Net Investment Income Turnover Rate
of Period Period (000) Assets (Including Assets (Excluding (Loss) to Average
Waivers, Waivers, Net Assets
Reimbursements and Reimbursements and (Including
Offsets) Offsets) Waivers,
Reimbursements and

Municipal
Bond Fund
Advisor $10.11 3.21% $1,888 0.80% 1.64% 2.49% 46%
Shares
2004*
Short-Term
Municipal
Bond Fund
Advisor $9.97 1.05% $1,320 0.80% 1.44% 1.68% 17%
Shares
2004*